Freddie Mac Sues American Home Mortgage

September 13, 2007 No Comments »

Freddie Mac has filed a lawsuit against American Home Mortgage in an attempt to acquire information needed to continue servicing $800 million in mortgages owned by the GSE.

On September 10th, Freddie Mac asked a bankruptcy court in Delaware to force AHM to turn over details necessary to successfully service the loans in the interim.

The information is critical for Freddie Mac, who must oversee timely payments, impound accounts, and more.

Freddie Mac said in a filing that American Home had been servicing roughly 4,500 of the GSE’s loans, and that an agreement to hand them over was ironed out, but never acted upon.

Just yesterday I highlighted a story where a dozen Maryland residents had discovered their property tax checks had bounced.

Late last month, American Home won the right to continue servicing $5.2 billion in agency-backed loans that Fannie Mae had attempted to capture.

The servicing unit has continued to operate since the mortgage lender filed for bankruptcy, and is the only asset of real value at American Home Mortgage.

American Home Mortgage announced that it would be shutting down in early August amid mounting margin calls, layoffs, and a deteriorating secondary mortgage market.

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